Initial Jobless Claims Hover Near 400,000

NEW YORK ( TheStreet) -- The latest read on initial jobless claims fell short of expectations and remained stuck near 400,000.

Some 403,000 Americans filed for first time unemployment benefits in the week ended Oct. 15, according to the Labor Department. The most recent weekly read ticked down by 6000.

Economists expected a decline of 4,000 to 400,000 from the originally reported 404,000 claims in the prior week. However, the prior week's claims were upwardly revised to 409,000.

While initial jobless claims hovered above 400,000, the level dropped to the lowest since the week ended Sept. 23, and the four-week moving average for jobless claims fell to its lowest level in six months.

Meanwhile, continuing claims for the week ending Oct 8 came it at 3.719 million, up from 3.694 million in prior week.

"The trend in initial claims has clearly nudged high from the spring lows, but with third quarter growth looking to have been about 3%, it is hard to see why companies would now be rushing to let people go," said High Frequency Economics before Thursday's report.

Initial claims have not fully recovered from a plunge in the last week of September. High Frequency Economics attributes the drop to Hurricane Irene, although the Labor Department points to seasonal adjustments.

Weakness in the jobs market has limited consumer spending and proven a severe drag on the pace of the U.S. economic recovery. President Barack Obama faces the challenge of pushing a $447 billion jobs plan through Congress. In a Senate vote earlier in October, however, lawmakers blocked his package of tax cuts and spending. The President continues to fight for his proposal on the campaign trail.

While the economy added more jobs than expected in September, the gains were not enough to bring down the nation's unemployment rate, currently stuck at 9.1%.

-- Written by Chao Deng in New York.

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